"Nope, you definitely didn't log that"

by Steven Harris


Last week I outlined what my dream ‘clever house’ would look like, and asked how we could turn this sci-fi dream into a practical reality. Now I’ll outline my big idea for how to transform the demand and supply chain, so that energy becomes a self-renewing resource.

The first step is  for every home to have a ‘Smart’ energy meter that our energy supplier/buyer trusts. And, make it worthwhile, we’d need to be on a variable tariff, where energy costs vary at different times of day. This can happen even now.

There would need to be a tariff forecast that your clever house could avidly tune into (like a housekeeper listening to the weather to plan hanging out the washing), so it could plan when it is going to buy and sell power. To do this, it would have to know your needs. This is the not-fun bit: the house would probably insist that you start living by the equivalent of an Outlook calendar:

You: what have you been doing all day? I told you I was going out this evening!

House: well you didn’t put it in the diary so I haven’t charged the car battery for you. So you can’t! Martini anyone?

In its most basic form, variable tariff is just the old Economy 7, where the off-peak 7 overnight hours cost less than the peak daytime hours. This is good for giving the nation’s power stations some base load overnight, but it misses a trick. It doesn’t take advantage of those windy or sunny times when there may be lots of ‘free’ renewable energy around. Likewise it doesn’t manage the times when the National Grid is struggling to meet demand – that World Cup half-time cup of tea, for instance.

What we really need is a real-time variable tariff. And, to work properly, this has to be adjustable by the millisecond, so the demand throttle can be opened and closed to exactly meet available power supplies.

At the moment, even on a windy night, wind turbines sometimes have to be turned out of the wind. Likewise, in France, nuclear power stations sometimes have to be ‘run to earth’ at night. This is because of the low demand for their power at these times: in other words, an excess supply.

This illustrates why a variable tariff might work. If households could see an incentive to consume their power at these times of excess supply, wind need never be wasted and base load could always be guaranteed. This would make power stations (and wind turbines) more efficient and economical to run, and would mean that energy prices were for production, not periods of being on stand by.

Already the wholesales price of electricity varies from half-hour to half-hour – though not by an amount that would drive a business plan for persuading householders to adopt energy-management technology.

But, as you might have guessed, this is only the small picture! We’re more clever than that.

Even the mainstream press has been running headlines on the tens of billions of pounds of investment needed by our national energy infrastructure. Depending on the political slant of the newspaper, the blame for this is often placed at the door of renewable energy targets.

At the moment, most of us in the UK heat our houses with gas. Natural gas is generally the lowest-carbon way of doing this. But as (according to government forecasts) electricity generation becomes lower carbon, gas may become comparatively less desirable, and will certainly be more expensive. So we will all start looking to heat our homes with the new, lower-carbon electricity. Maybe this will be via a heat pump, which hopefully we have learned how to do by then (See the Energy Saving Trust’s field trial report), but it will still mean an order of magnitude more energy will have to be distributed via the electricity grid rather than the gas grid.

It is this forecast that puts all those zeros on the end of the bill. More energy means more wires, bigger peak demands means more and thicker wires.

I would argue, slightly naively (hey – I’m the guy who wants a robot, remember?), that this is old-school, 20th-century thinking. Back then, you looked at demand and its peaks, and made sure you matched them with supply. But ‘clever homes’ can avoid those peaks. Because a clever house would switch the heating off when most demand is on the system, the infrastructure would only have to meet an average demand, rather than the peak.

And how can that peak be avoided? By pricing differentials, so that as demand approaches the peak, all the clever homes will say ‘no thanks’ and switch off. Even better, by exporting their stored energy back to the grid, they can help to turn demand into supply.

So instead of having to find £32 billion – yes, £32 billion – to invest in a dumb infrastructure, we could use that money to fund a variable tariff system that makes demand-side management attractive to householders, and removes the need for a lot of that infrastructure enhancement in the first place.

Fantastic – let’s get going! Mine’s on the rocks, please.

But before we all get excited, we need to realise that this idea contains many, many complex unknowns. The biggest one is that it would run as a ‘chaotic’ complex system, where no one person sits at a big control desk, in some secret location, benignly watching all. Instead, the system would be at the mercy of 20 million clever homes and their occupiers.

It’s more like newfangled ‘crowd-sourcing’ or ‘cloud-computing’ on the internet than like old-fashioned production.

It is the future – and it’s all very exciting – and if we get it right, it could mean our homes will be cheaper and more sustainable to run and every unit of renewably generated energy that we could possibly harvest could be made good use of.

Clever, or what? Now: to get the washing-up done…